New Jersey Joins 42-State Lawsuit Alleging Generic Drug Price Fixing by Novartis and Sandoz

NEW JERSEY — New Jersey has joined a coalition of 42 states and territories in filing a multistate lawsuit against Novartis AG and its generic drug subsidiaries Sandoz AG and Sandoz Group AG, alleging a broad conspiracy to fix prices and manipulate markets for dozens of generic prescription drugs.

The complaint, announced Tuesday by Acting Attorney General Jennifer Davenport, asserts that the companies coordinated with other generic manufacturers to fix prices, allocate customers, and rig bids for 31 widely used generic medications. State officials contend the alleged conduct drove up costs for patients across New Jersey and the nation, affecting private insurance plans, Medicare and Medicaid, and individuals paying out of pocket for prescriptions.

According to the filing, the alleged conspiracy was supported by extensive communications among industry executives, including meetings, calls, and exchanges designed to reduce competition and maintain artificially high prices. Investigators cited evidence drawn from cooperating witnesses, more than 20 million documents, and millions of phone records involving hundreds of sales and pricing personnel across the generic drug industry.

The lawsuit further alleges that Novartis sought to shield itself from legal liability by transferring assets and spinning off Sandoz in 2023, despite what the complaint describes as the companies’ operation as a single integrated entity for years. The states argue that the spinoff was structured to drain assets from Sandoz while leaving it responsible for mounting antitrust liabilities tied to earlier cases.

“Prescription drug pricing is extremely opaque, and Novartis’s conduct is one of the most egregious examples of conspiratorial drug price fixing we have ever seen,” said DCA Acting Director Jeremy E. Hollander. “Generic drugs are intended to save patients money, and these actions did the exact opposite.”

New Jersey and its multistate partners previously filed three related complaints targeting other manufacturers and executives. Those actions focused on overlapping conspiracies involving oral, injectable, and topical generic drugs accounting for billions of dollars in U.S. sales. The newly filed complaint links Novartis and Sandoz to those earlier cases, alleging their participation in the same overarching scheme.

The complaint alleges violations of federal antitrust law, the New Jersey Consumer Fraud Act, and the New Jersey Uniform Voidable Transactions Act. It seeks injunctive relief, civil penalties, and other remedies aimed at restoring competition and recovering overcharges paid by states, insurers, and consumers.

Joining New Jersey in the lawsuit are states and territories including New York, Pennsylvania, California, Texas’s neighboring jurisdictions, the District of Columbia, and Puerto Rico, among others. The case was filed in federal court in Connecticut and is being handled for New Jersey by the Division of Law’s Antitrust Section under the supervision of senior state attorneys.

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